Replies to This Discussion

Permalink Reply by olddog573 on April 3, 2016 at 5:32

Is this the first completion for Vine?  I wonder how their wells will stack up to other players that have been active here for the past couple of years?  

Permalink Reply by Skip Peel - Mineral Consultant on April 3, 2016 at 5:38

No. Vine isn't starting from scratch when it comes to designing HA wells in this rock.  Many of the upper management and supervisors working for SWEPI moved over to Vine.  The same can be said for GEPH and the former Encana HA team.  There is no learning curve required.  Different companies, same people managing the drilling.

Permalink Reply by Chris on April 4, 2016 at 6:34

Skip, do yoget this info from SONRIS or DI?

Permalink Reply by Skip Peel - Mineral Consultant on April 4, 2016 at 6:42

Neither, Chris.  The local Shreveport newspaper sporadically publishes an O&G column.  They get the data from the OOC district office on a weekly basis by picking up paper copies of the completed allowable and permit to drill reports.  If the database staff is running behind in entering the district report data the newspaper will occasionally publish information that is not yet available on SONRIS.

Permalink Reply by Chris on April 4, 2016 at 6:54

Interesting. I notice that the Dowling 20-29-32 wells were completed 7/3/15 but the completion report was not created until 2/15/16 and stamped received 2/19/2016. Aren't there rules/laws in place as far as reporting goes?  It seems to be in this case, excessive timing from completion to when the report is filed with the state. 

Permalink Reply by Skip Peel - Mineral Consultant on April 4, 2016 at 7:06

The MRD staff has never been particularly timely in their reporting.  I have pointed this out and discussed it with staff at the district office on several occasions.  First, the OOC has a history of being pretty lenient with operators who are otherwise seen as cooperative and making efforts to come into compliance.  Secondly, the acquisition of the Wildhorse Resources wells and undeveloped leasehold meant a lot of work for the staff responsible for reporting compliance.  In mid-May there was a significant amount of new report data entered in SONRIS over about ten days.  Not only were completion and allowable reports filed for a lot of wells (about 13 or so) but the status of uncompleted wells was also updated.  I expect this is a function of the OOC encouraging MRD to get caught up and the MRD staff finally bringing all their data up to date.  I suspect that we will see another round of multiple wells reported complete in the following 2 or 3 weeks.

Permalink Reply by Chris on April 6, 2016 at 4:35

It seems like they are playing with fire by counting on the leniency of the OOC, considering the financial status of LA.  It is my understanding that Mr. Ieyoub is not exactly operator friendly.  

Permalink Reply by Skip Peel - Mineral Consultant on April 6, 2016 at 4:47

The OOC has always been, and will remain, industry friendly.  I wouldn't bet on Mr. Ieyoub placing pressure on operators for more timely reporting of completion data.  Keep in mind that state revenue is the controlling factor and delayed completion or allowable reports do not delay production reporting.  Additionally in the specific case of all horizontal wells, such as MRD's Terryville Complex wells, they are exempt from paying severance tax for two years or until the cost of the well is recovered.  I agree with you that Mr. Ieyoub's past history shows him to be a no nonsense and capable administrator.  Hopefully he will be more amendable to other mineral owner/lessor issues but I don't expect a significant change from the past. 

Thomas Harris is the new head of DNR.  The following is from the DNR webpage.

Dedicated to improving the environment, Thomas Harris currently serves as Administrator of the Technology Assessment Division with the Louisiana Department of Natural Resources (LDNR). He has held that post since 2014. Prior to working for the LDNR, Harris spent nearly a decade with the Louisiana Department of Environmental Quality. While there, Harris developed the state regulation and remediation standards for the evaluation and corrective action of regulated sites. Harris has more than 20 years of executive management experience in the oversight of environmental programs, human health risk assessment, environmental toxicology, and environmental regulatory compliance. He has a Bachelor of Science in Biochemistry from Louisiana State University and a Masters of Science in Public Health in Environmental Toxicology and Human Health Risk Assessment from Tulane University School of Public Health and Tropical Medicine. 

Richard Ieyoub, Sr. of the Baton Rouge firm, Couhig Partners, was the attorney general of Louisiana from 1992 to 2004 and the Calcasieu Parish district attorney in Lake Charles from 1984 to 1992. During his tenure as district attorney, he headed the national Commission on Model State Drug Laws. He was active in the fight against narcotics through the Louisiana Coordinating Council on the Prevention and Treatment of Drug Abuse and worked closely with the National Council Against Drinking and Driving. He established a statewide school safety program and created a high-technology unit that targets sexual predators on the Internet. Richard received his bachelor's degree in history in 1968 from McNeese State University and his Juris Doctor degree in 1972 from Louisiana State University Law Center in Baton Rouge.

Permalink Reply by Chris on June 15, 2016 at 9:18

Skip, 

Have you seen this suit filed by CLB Properties against MRD? MRD has owned their Terryville asset for a year and a half and have had plenty of time to get their data up to date. While they did attempt to update some info with the state in March/April, they have certainly fallen short. The failure to report wells as producing and report current and accurate production volumes is deliberate. Hopefully Range Resources is a better steward of the asset and the state does a better job of holding operators accountable. 

Attachments:

• CLB Properties, Inc. v. MRD Operating, LLC et al.pdf, 1 MB

Permalink Reply by Skip Peel - Mineral Consultant on June 15, 2016 at 9:39

No, I haven't Chris.  Doesn't appear that CLB Properties, Inc. is registered with the Secretary of State.  Although MRD has done better recently regarding timely well status and completion reports, I agree that they have not been properly in compliance with their reporting for a protracted period of time.  In fact I have mentioned this issue on several occasions to the appropriate staff at the Office of Conservation Shreveport Office.  Although the OOC staff has made inquiries with MRD's compliance staff there still remains far too many wells not reporting production in a timely manner.  Before filing this suit did you make any inquiries of MRD?  I can go back to my spreadsheet and check to see which wells are currently not in compliance but I suspect that most of the backlog is made up of Cross Unit Lateral wells.  There were questions by MRD to OOC about how to report allocated production and how to file forms that detail as drilled perforated laterals.  The last I asked the OOC staff seemed to think that the questions had been answered and there was an expectation that MRD would get caught up in the near future.  Have you examined the Commissioner's public hearing schedule for the MRD applications to have existing wells certified as alternate unit wells for existing drilling and production units?

Permalink Reply by Chris on June 15, 2016 at 10:04

They are actively applying with OOC to have existing wells certified as alt unit wells in many units. To be clear, I didn't file this suit. Since most of the new drills are CUL's that would make sense that that is where the backlog is. It is my understanding that they do survey plats pre-drill and as-drilled. They know exact unit allocations for production. It is simple math and should be in a format easy to understand on SONRIS.

I don't remember the name of the form that the operator has to file with the state that says when the wells have paid out. I assume this form is to put the state on notice that a specific well has paid out and is no longer tax exempt.  I also notice that very few of the MRD wells have this form in the well files. If I assume wrong, how does the state track well payouts, to know which wells are no longer tax exempt? Most MRD Terryville wells certainly payout prior to the 2 year cut off for the exemption and more likely payout in 6-9 months. 

Permalink Reply by Skip Peel - Mineral Consultant on June 15, 2016 at 10:20

I performed a quick review and find that well status is up to date on SONRIS lite for the MRD wells.  There are still far too many that do not have production reported even though they were reported complete  from three to seven months ago.  As to your questions regarding the forms for payout and how the state tracks well payout, you would have to ask the OOC staff.  I have not performed any research regarding those topics.

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